There is nothing quite as stressful as losing your employment. Knowing that you don’t have the means that you used to that provide your quality of life is unnerving. Luckily, there are programs that are put in place to help you get through this hard time. However, it can leave people wondering what that may mean for their tax situation. Do you still have to pay taxes on the unemployment that you’re making? Mark Dicus & Company is here to talk about what it means for your taxes and filing when you are unemployed.
Do You have to Pay Taxes if You Don’t Work
Just like anything else in life, the circumstances in which you may find yourself unemployed are unique and so are your taxes. Depending on what income you have made throughout the year, you may still be required to pay taxes on that. If you don’t have any taxable income to report in your tax return, the IRS will more than likely reject your return. If you have picked up a side hustle while you are unemployed, you need to make sure that it doesn’t count as self employment. If you are unsure about whether or not you have taxable income, you need to talk to a professional to answer all of your questions on the subject.
Paying Taxes on Unemployment Benefits
Like mentioned above, there are programs like unemployment benefits that can kick in when you lose your job. Thank heavens for that. That unemployment compensation is more than likely considered taxable income. It is this way in most states. Just like your taxable income, you can have taxes withheld from your unemployment compensation so that you aren’t surprised with a large tax bill when it comes time to file your tax return.
Forms Needed to File Taxes on Unemployment
If you have gotten unemployment compensation over the last year, you will be getting a 1099G Form to file your return. On top of that, you will need to have your W-2 that you get from your previous employer to make sure you’re paying taxes on the income you made before losing your job. If you have picked up a side hustle, you will be considered self employed and need to find out if you have made enough to pay taxes on it or not. You may be able to take advantage of the Earned Income Tax Credit this year since you lost your job. It is worth taking a look into so that you can make sure you’re taking advantage of all tax breaks available to you.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you have lost your job this year and are wondering what that means for your job, you can turn to Mark Dicus & Company to help answer all of your questions. We have extensive experience in tax filing and can help you get prepared for tax season this year. Call us today!